Renewable Energy Policy: A Driving Force

Transcription

1 Renewable Energy Policy: A Driving Force Chris Rose Executive Director Renewable Energy Alaska Project (REAP) WEATS Anchorage, Alaska August 14, 2007

2 What is Renewable Energy Alaska Project (REAP)? Alaska s first and only education and advocacy group for renewable energy An Alaskan coalition of small and large electric utilities and utility interests, environmental groups, consumer groups, businesses, Alaska Native organizations and energy agencies with the goal of increasing the production of renewable energy in Alaska.

3 REAP Director Members Chugach Electric Association (CEA) Municipal Light and Power (ML & P) Golden Valley Electric Association (GVEA) Homer Electric Association (HEA) Kotzebue Electric Association (KEA) Alaska Village Electric Cooperative (AVEC) TDX Power Alaska Power Association (APA) Alaska Power and Telephone Sierra Club Alaska Center for the Environment Alaska Conservation Alliance Alaska Public Interest Research Group (AkPIRG) Rural Alaska Community Action Program (RurALCAP) Green Star Chena Hot Springs PowerCorp Alaska, Inc. Siemens Building Technologies Alaska Inter-Tribal Council Aleutian/Pribilof Islands Association (APIA) Yukon River Inter-Tribal Watershed Conference

4 REAP ADVISORY MEMBERS Alaska Energy Authority National Renewable Energy Lab Denali Commission Alaska Housing Finance Corporation Cold Climate Housing Research Center US Department of Agriculture Rural Development

5 REAP s Strategies Put viable renewable energy projects in the ground Advocate for statewide policies that promote renewables Grow the market for renewable energy Foster and demonstrate stakeholder unity in support of renewable energy Promote energy efficiency

6 What is Renewable Energy? Wind Geothermal Solar Biofuels Hydro Tidal & Wave

7 Advantages of Renewable Energy No fuel costs = stable prices Local Clean Inexhaustible

8 Renewable Energy is Risk Management: Worldwide Energy Use Expected to Double by To Date Projected Year

9 Renewable Energy is Risk Management Two Thirds of the World s Proven Conventional Oil Reserves are in the Persian Gulf

10 Renewable Energy is Risk Management: Natural Gas Prices are Uncertain Nominal $/MMBtu (Henry Hub) Nominal $/MMBtu (Henry Hub) Daily price history of 1st-nearby NYMEX natural gas futures contract NYMEX natural gas futures strip from 07/21/ Source: LBNL

11 Renewable Energy is Risk Management: A Carbon Tax is Inevitable Widespread anticipation that CO 2 will soon get a value Recent US Supreme Court decision ruled that CO 2 is a pollutant under the Clean Air Act Congress is considering over ten different options today $10 - $85 per ton of CO 2 Many utilities are already figuring carbon risk into their integrated resource plans (IRPs)

12 Renewable Energy is Risk Management: The World s Climate is Changing For Swiss Re, climate change is more than a scientific issue. It is a financial issue. Chris Walker, Managing Director, Greenhouse Gas Risk Solutions Unit for Swiss Re, the world s second largest re-insurer

13 Renewable Energy is Risk Management: The $40 billion/yr Clean Energy Market is Expected to Quadruple by 2015 General Electric Goldman Sachs Siemens British Petroleum FedEx Kinkos

14 Wind is the Fastest Growing Energy Sector in the World Total Installed Wind Capacity Capacity (MW) Germany: MW 2. United States: 6800 MW 3. Spain: 6202 MW 4. Denmark: 3121 MW 5. India: 2800 MW World total 2004: MW Source: WindPower Monthly United States Europe Rest of World

15 Federal Production Tax Credit Primary Federal Policy 1.9 cent kwh tax credit Expires December 31, 2008

16 Recent Wind Project Development Has Largely Been Driven by State Policy

17 DSIRE: March 2007 Renewables Portfolio Standards *WA: 15% by 2020 CA: 20% by 2010 NV: 20% by 2015 AZ: 15% by 2025 MT: 15% by 2015 MN: 25% by 2025; (Xcel: 30% by 2020) IA: 105 MW CO: 10% by 2015 *NM: 20% by 2020 (IOUs) 10% by 2020 (Co-ops) WI: requirement varies by utility; 10% by 2015 Goal IL: 8% by 2013 VT: RE meets load growth by 2012 ME: 30% by 2000; 10% by 2017 goal - new RE MA: 4% by % annual increase RI: 15% by 2020 CT: 10% by 2010 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18%¹ by 2020 *MD: 7.5% by 2019 *DE: 10% by 2019 DC: 11% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 Minimum solar or customer-sited requirement * Increased credit for solar or customer-sited ¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource State RPS State Goal Solar water heating (SWH) eligible

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19 State Production Tax Credits Examples: New Mexico: 10 years, 1 cent/kwh Oklahoma: Through 2011, cents/kwh Issues: Transferability: Allow non-taxable entities to transfer credit to taxable entities (e.g., Oklahoma) Federal PTC: May not need to worry about federal PTC impacts private letter ruling suggests that state PTCs will not impact federal PTC

20 Integrated Resource Planning: It s Back Western IRPs are leading to significant planned wind investments, above and beyond RPS requirements

21 Feed In Tariffs Used extensively in Europe Ontario s Standard Offer Program Established in 2006 through the Ontario Power Authority Sets a price for electricity generated by small generators of electricity (under 10MW) from renewable resources like solar, wind, small hydro and some biomass Twenty (20) year contracts Generators pay all interconnections and licensing fees Prices paid for wind, small hydro and biomass begin at 11 /kwh in 2006 and escalate over the 20 years 42 /kwh for solar photovoltaic projects

22 February 2007 Public Benefit Funds for Renewables Cumulative (Million $) $95 $2,048 $10 $111 $22 $127 $1,122 $20 $85 $80 VT: $36 MA: $383 RI: $10 CT: $338 NJ: $279 DE: $11 DC: $ State Funds + DC $4 B by 2017 Funded by Voluntary Contributions

23 2007 Alaska Legislative Session REAP Policy Consensus: HB152 Renewable Energy Fund Loans and production credits Grants with matching monies Administered by the Alaska Energy Authority with seven member energy stakeholder oversight committee appointed by the Governor Funded with capital appropriations Passed the House 35-0 Needs just one more Senate (Finance) Committee hearing 23 sponsors in House 13 sponsors in the Senate

24 Why Renewables Now? Natural gas is becoming less available and more expensive & the Railbelt s natural gas turbines are aging Diesel prices are driving people out of rural Alaska Alaska could become a world leader in diesel (e.g. wind-diesel) hybrid technology Without sequestration new coal plants will increase CO 2 emissions and be subject to expensive carbon regulation * Power plants last years * Many major decisions for Alaska s long term future will be made in the next 5-10 years

25 Iceland s Vision

26 Thanks! Chris Rose REAP Executive Director 308 G Street, Suite 218 Anchorage, Alaska crose@alaska.net alaskarenewableenergy.org